Futures Fall After GDP Data; J.C. Penney, DR Horton Rising

By Sam Mamudi

At the end of what’s been a good week for the leading stock indexes, futures are showing losses, with both the Dow Jones Industrial Average and Standard & Poor’s 500 index off more than 0.2%. The dip is partly due to disappointing GDP data released Friday morning:

Gross domestic product rose at a 2.5 percent annual rate, lower than forecast, after a 0.4 percent fourth-quarter advance, Commerce Department figures showed today in Washington. The median estimate of 86 economists surveyed by Bloomberg called for a 3 percent gain. Consumer spending, the biggest part of the economy, climbed by the most since the fourth quarter of 2010.

A boost to wealth from rising stock and home prices, combined with a reduction in savings, helped Americans cushion an increase in the payroll tax that has now begun to pinch. Recent data signal the strength in other parts of the economy may also not be sustained as across-the-board cuts in planned federal spending, together with slower stockpiling by companies, may be restraining investment and employment.

It’s really rather amazing that at every turn our elected leaders do their best to sabotage economic recovery, in this case allowing the absurd budget sequester cuts to kick rather than reach a compromise budget deal.

In less irritating news, shares of J.C. Penney (JCP) continue to pop this morning on the back of news that George Soros has taken a close to 8% stake in the company — quite the vote of confidence by one of the world’s most famous investors.

Also rising are shares of homebuilder DR Horton (DHI), up 6% after reporting earnings and revenue that comfortably beat analysts’ estimates thanks to the strengthening rebound in the housing market:

Ground-breaking to build new homes rose 7 percent in March to their highest level since June 2008.

Orders rose 34 percent to 7,879 homes, with a total value of $2 billion, up from $1.3 billion in the same quarter last year. Orders are a key indicator for builders, who do not recognize their value until they close on a home.

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Earnings reports, corporate strategies and analyst insights are all part of what moves stocks, and they’re all covered by the Stocks to Watch blog. We also look at macro issues, investor sentiments and hidden trends that are affecting the market. Stocks to Watch gives you the full picture of the U.S. stock markets, all day long.

The blog is written by Ben Levisohn, a former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek.